Tax and spending shocks in the open economy: Are the deficits twins?
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DOI: 10.1016/j.euroecorev.2019.103300
Abstract: We present evidence on the open economy consequences of US fiscal policy shocks identified through proxy-instrumental variables. Tax shocks and government spending shocks that raise the government budget deficit lead to persistent current account deficits.… read more here.
Keywords: open economy; tax; current account; spending shocks ... See more keywords